Funding no-shows frustrate mining junior New Talisman

Funding no-shows frustrate mining junior New Talisman

By Jonathan Underhill

Oct. 5 (BusinessDesk) - New Talisman Gold Mines, which is scraping up cash to begin bulk sampling work at its Talisman gold mine project in New Zealand’s Hauraki district, is frustrated that a second potential investor has failed to come up with promised funds.

Last month Auckland-based Talisman sought legal advice after a Chinese investor failed to settle on the purchase of about 19.9 percent of the company and last Friday it disclosed a second investor hadn't honoured their $400,000 obligation under an underwriting agreement. Combined, the two investors would have provided about $1.8 million toward its $2.2 million target.

Chief executive Matthew Hill said the company has about $550,00 in cash and needs to raise a further $1.6 million to cover bulk sampling and overheads for 18 months. At the end of that period, it would expect to post a $1.3 million cash surplus after expenses, he said.

New Talisman grew out of Heritage Gold in 2012 after the mining company hived off projects in Mongolia and Papua New Guinea to focus on the Talisman prospect. In a pre-feasibility study from 2013 the company estimated a mine life of three to five years, based on reserves of 28,800 ounces of gold and 127,800 ounces of silver.

Bulk sampling would give New Talisman the data to complete a feasibility study and also some cash flow, as it would involve extracting about 600 tonnes of rock a month at an average 10 grams of gold per tonne, Hill said.

"We're working very closely with a number of groups just to raise that final amount of funds," Hill said. Once the funds were raised it would be about six months before the company began pulling ore out of the mine, he said.

New Talisman has some road work to do to satisfy its roading plan but has all other consents in place. It was hopeful of a joint venture with Newcrest Mining to look at a deep extension of Talisman. In June, Newcrest inked a farm-in agreement with Laneway Resources, whose permit skirts New Talisman's Rahu permit near Talisman.

Hill says his company also wants to explore a "mystery vein" between Talisman and Rahu that was uncovered in the 1980s. The district is home to many historic gold mines, including old workings of the Talisman mine.

Hill said the company has had discussions with the Chinese investor group, led by Yang Xia, since the failure to settle its purchase. The investors had indicated they were interested in taking a bigger share of the venture.

New Talisman shares rose 0.8 percent to 0.605 cents on the NZX today, valuing the company at $96.6 million. Yang Xia was to have bought shares at 0.8 cents each.

(BusinessDesk)

© Scoop Media